LOUISVILLE, KY. — Papa Johns will present steerage to franchisees after North American comparable-store gross sales declined 1.4% within the second quarter ended June 25. Comparable gross sales elevated 2.2% in home company-owned eating places however fell 2.3% in North American franchises eating places.
“In the course of the second quarter, a spot remained between the efficiency of our firm eating places and that of our franchisees,” mentioned Robert M. Lynch, president and chief govt officer. “Over the previous 12 months, our franchisees have been rising their costs at a quicker charge than our company-owned eating places in an effort to protect margins throughout this extremely inflationary interval. Because of this, they’ve skilled a bigger decline in transactions relative to our company-owned eating places this previous quarter.
“We’ve been performing ongoing enterprise critiques with every franchisee, using cross-functional groups to reinforce their enterprise operations, together with figuring out alternatives to optimize their pricing and promotional fashions. This surgical method is delivering sequential enchancment in transactions and better buyer satisfaction score systemwide.”
Worldwide comparable-store gross sales had been down 1%, largely attributable to inflation in the UK, though worldwide comparable-store gross sales improved 5% from the primary quarter.
Internet revenue attributable to frequent shareholders within the quarter was $17.8 million, or 55¢ per share on the frequent inventory, which was down 30% from $25.2 million, or 71¢ per share, in the identical time of the earlier 12 months. Complete revenues fell 2% to $514 million from $523 million, pushed by decrease revenues within the North American commissary section as a result of commodity worth declines.
Originally of 2022, Louisville-based Papa Johns had a objective of opening 1,400 to 1,800 new items between 2022-25, which implied annual world internet new unit progress between 6% and eight% within the fiscal years 2023, 2024 and 2025, Mr. Lynch mentioned.
“Since we put these targets in place, we have now skilled many unexpected circumstances, together with, however not restricted to, an prolonged battle in Ukraine, materials inflation across the globe, allowing and building delays inside North America, and better financing prices as a result of rate of interest will increase,” he mentioned.
Because of this, the corporate has reset its objective to an annual vary of 5% to 7%.
Over the primary half of the fiscal 12 months, internet revenue attributable to frequent shareholders was $40.1 million, or $1.21 per share on the frequent inventory, up 12% from $35.7 million, or $1 per share, in the identical time of the earlier 12 months. Complete revenues fell 2.2% to $1.04 billion from $1.07 billion.